Chinese firms’ green-tech expansion hinges on Hong Kong, senior bankers say

Senior banking executives from major Hong Kong banks are asserting that the city will assume a more prominent role in financing Chinese green-technology firms as they expand internationally. This shift is driven by fragmentation in geopolitics and soaring funding costs, which are altering capital deployment dynamics in the global energy transition.

Executives from Bank of China (Hong Kong), DBS, HSBC, and Standard Chartered discussed these matters during a panel at a forum organized by the Hong Kong Green Finance Association and the Greater Bay Area Green Finance Alliance. The panelists emphasized Hong Kong's robust sustainable-finance market and offshore yuan liquidity as valuable assets that could facilitate capital flow to green and climate-resilience projects in developing economies.

Wang Huabin, deputy CEO of Bank of China (Hong Kong), highlighted the city's position as a bridge for Chinese green technology to go global, given its established status in sustainable finance. HSBC's global head of sustainable finance, Natalie Blyth, pointed out that Chinese companies are at the forefront of low-carbon technologies, and their deployment overseas on a larger scale could significantly contribute to fighting climate change.

HSBC recently launched a US$4 billion dedicated fund to aid mainland companies in expanding to overseas markets via Hong Kong. While capital is now abundantly available, the primary hurdle is locating projects that can generate returns at acceptable risk levels, particularly in developing nations. DBS Bank's chief sustainability officer, Kelvin Wong, underlined that the focus has transitioned from accessing capital to ensuring the investibility of projects.

Higher funding costs, currency risks, and other challenges could render projects in emerging markets unattractive even when comparable investments would be viable elsewhere, said Standard Chartered's chief sustainability officer, Marisa Drew. She suggested that targeted government assistance and financial innovation could help alleviate these barriers and mobilize additional private capital.